Once the Memorandum of Understanding is signed by both parties, the next step is usually to develop and negotiate the final asset purchase agreement, share purchase agreement or merger agreement (depending on the structure of the transactions) that we commonly refer to as a “sales contract” in this article. The purpose of the sales contract is to finalize all the terms of the purchase transaction, which should be in accordance with the MOU, but contains important legal considerations that are not included in the MOU. While declarations of intent are usually 1-3 pages long, sales contracts are usually 50-100 pages long. Reps and warranties refer to factual allegations made by a seller in the course of an attempt to induce a buyer to buy his business. Each of the parties involved in the transaction relies on the other to provide real information about the transaction. The seller assures that the business is worth the investment that the buyer plans to make. Despite this finding, there are no specific regulations on the seller`s liability resulting from the target company`s qualification in the context of cbT or TCO share purchase contracts. The legal consequences of the breach of insurance and the guarantees provided by the agreements differ depending on whether the purchaser has performed due diligence on the legal, economic, fiscal and various aspects of the target company and the shares subject to sale. On the other hand, Ayo-lu makes that insurance and guarantees for the target company cannot be considered as specific qualifications notified by the seller in accordance with Article 219/1 tCO7.
2. Tax control issues: Tax control ensures that the business put up for sale has never been on the radar of the IRS (or any other appropriate tax service) for breach of income and deduction data. During negotiations on the purchase of a business, it is the buyer`s responsibility to demand more information from the seller regarding certain factual claims of the seller. This is due to the fact that the buyer bears more risk Systemic riskThe risk of the system can be defined as the risk associated with the collapse or failure of a business, sector, financial institution or entire economy. This is the risk of a major failure of a financial system in which a crisis occurs when investors lose confidence in the users of the capital that the seller must ensure that all questions are forwarded to the seller for answer and that all the necessary information for the transaction is provided. If you plan to sell your business before the sales contract, you need to go through different phases that will help you maximize the final price. These measures can be decisive for the future of the company. If you need instructions from a reliable team during the process, please contact us. Shares are the fundamental theme of share purchase contracts. Therefore, the seller`s primary obligation is essentially a result of defects with respect to the shares. In the absence of specific provisions regarding the representations and guarantees of share purchase contracts, this obligation is subject to general provisions. Accordingly, the seller first considers that the shares are properly issued by the target company, that, if necessary, the shares are properly issued and that similar issues directly concern the shares.
As a result, the representations and guarantees that determine certain qualifications of the target company, such as the target company. B, are well established, has the necessary authorizations and licences to carry out its activities, has the right to use the assets necessary to maintain its activities in accordance with the law and it carries out its activities in accordance with the law and are included in the stock sales contracts.